RBI made NBFC registration process easier now

Are you planing to set up a non banking
finance company (NBFC)? The process of making an application has become a
lot easier now.

Reserve Bank of India has decided to put
the system on fast track for non-deposit taking companies by reducing
the application form and the checklist of documents from the existing
set of 45 documents to just seven and in some cases eight.

RBI in statement said, “This is being
done so that the registration of new NBFCs would be smoother and
hassle-free.” It said that the checklists mentioned are indicative and
not exhaustive. “The RBI, may, if necessary, call for any further
documents to satisfy itself on the eligibility of the company seeking
registration as NBFC. In the event of the RBI calling for further
documents, the applicant must respond within a stipulated time of one
month,” it said.

The processing applications of
non-deposit taking NBFCs would be on the fast-track mode. As these
companies will not have access to public fund and will not have customer
interface, they will be subjected to less intensive scrutiny and due
diligence. The scrutiny for the deposit taking NBFCs and those who have a
customer interface would be more elaborate and hence require a separate
application form.

RBI has been converging regulations for
NBFCs on the lines of its banking sector rules as the difference between
the NBFCs and the banks get blurred. NBFCs like banks are now into
infrastructure financing and housing financing, agro-financing and
meeting the funding needs of the micro, small and medium Enterprises.
The changes in the registration process of NBFCs is in line with the
announcement made in the first bi-monthly monetary policy Statement,
2016-17 of simplifying procedures for the sector.